AFP

Propelled by inflation, the price of air tickets has begun to take off again after tumbling during the pandemic, a reversal that looks set to intensify due to environmental pressures, experts say.

For members of the International Air Transport Association, gathered in Doha for their annual meeting this week, minds are focused on how far such increases risk undermining passenger growth targets.

The IATA is also pleading for government support in reconciling the long-term commitment to net zero carbon emissions with those ambitious targets.

The aviation industry has just gone through two years where planes flew with rows of empty seats, even as they offered fares much lower than before the Covid-19 pandemic.

But with the sector still mired in the red despite movement restrictions being largely lifted, the bargain bonanza for passengers is very much over.

In the United States, the average price of an internal flight has shot up, from $202 in October 2021 to $336 in May this year, according to the Federal Reserve Bank of Saint Louis.

In the European Union, the price of a return ticket before tax in April returned to that seen in the same month of 2019, after a near-20 percent fall in 2020, according to aviation research specialists Cirium.

The oil price shock stoked by Russia’s invasion of Ukraine is the most obvious factor in these price rises.

Airlines estimate that fuel prices will account for 24 percent of their total costs this year, up five percentage points from last year.

Ticket prices are also being stoked by wider inflation — now at 40-year-highs in developed markets — as well as stronger-than-expected demand for tickets and labour shortages.

– Reality check –

But Scott Kirby, chief executive of United Airlines, said despite the trend clearly rising, prices had yet to shoot beyond historical norms.

“In real terms, pricing is back to 2014 levels… and it’s lower than it was essentially every year before” then, he said.

“So… I don’t think we’re going to see demand destruction.”

But Vik Krishnan, a partner at McKinsey & Co, is cautious about how long the current high demand will last.

“Some of the travel that we’re seeing right now is a function of all the stimulus that governments” pumped into economies during the pandemic, boosting citizens’ spare income, he said.

“The number one discretionary income spending is travel and that’s what people are doing.

But “how long that lasts remains to be seen”, he added.

– Climate crisis versus cheap holidays –

Beyond rising costs and fears that government stimulus will fade, airlines face commitments that sit very uneasily alongside each other.

On the one hand, they target carrying a total of 10 billion passengers by 2050, up from 4.5 billion in 2019.

And yet over the same time horizon, they are beholden to achieving “net zero” carbon emissions.

The total cost of transitioning the sector to “net zero” is estimated by the IATA at an eye-watering $1.55 trillion.

“Airlines don’t have the ability to absorb” the cost of that transition, IATA director general Willie Walsh said this week.

To reduce carbon emissions, the industry focus is on sustainable aviation fuels (SAFs), which are currently two to four times more expensive than fossil-based aviation fuel.

Some governments have already imposed SAF quotas, albeit in small quantities, resulting in airlines in turn imposing surcharges.

On Tuesday, the IATA urged governments to provide subsidies to ensure SAF production reaches 30 billion litres in 2030, up from 125 million litres in 2021. It also wants price curbs.

But even if such subsidies are forthcoming, “the transition to net zero will have to be reflected in ticket prices,” Walsh said.

Could that reverse the long-standing global trend of air travel progressively extending beyond the wealthy?

Krishnan believes such “democratisation” will become “harder”.

But he also said “low cost airlines have unleashed a world where people living in Northern Europe took it for granted that they could go on cheap vacations in Southern Europe”.

It would be “very hard for governments to unwind” such entrenched expectations, he warned.

As Europe seeks to move way from fossil fuels, Spain is racing ahead in developing green hydrogen, aided by a growing wind and solar power complex in efforts to decarbonise its economy.

Spain accounted for 20 percent of the world’s green hydrogen projects in the first quarter, second only to the United States, home to more than half of them, according to Wood Mackenzie consulting firm.

“A lot of countries are interested in green hydrogen, but in Spain the sector has rapidly accelerated” in recent months, said Rafael Cossent, research associate professor in energy economics at Comillas Pontifical University in Madrid.

The sector is still in its infancy, but the war in Ukraine has prompted the European Union to double its production goal for 2030 as part of efforts to reduce its dependence on Russian energy supplies.

“Spain has become a very attractive country for green hydrogen,” EU chief Ursula von der Leyen said during a visit to the country in May. “A shift is happening … to mass-scale competitive hydrogen”.

Green hydrogen is produced by passing an electric current through water to split it between hydrogen and oxygen, a process called electrolysis. It is considered green because the electricity comes from renewable sources of energy that don’t create any harmful emissions.

And while fossil fuels emit harmful greenhouse gases when they burn, hydrogen only emits harmless water vapour.

The technology is part of EU efforts to become climate neutral by 2050.

– ‘Great potential’ –

Green hydrogen could replace coal in heavy industries such as steel mills. It can also be used to make fertiliser and is being considered as a potential fuel for buses, trains and aircraft in the future.

A major drawback for green hydrogen, however, has been the high cost of producing it. It is much cheaper to make “grey” hydrogen, but its production requires using fossil fuels that emit greenhouse gases.

But technological progress and the surge in prices of fossil fuels has made green hydrogen more competitive.

Spain has “great potential” because it has a well-developed renewables sector, with important solar and wind resources, said Javier Brey, president of the Spanish Hydrogen Association (AeH2).

Cossent said that Spain has another advantage in its vast natural gas network and LNG terminals, which could be transformed to export hydrogen.

The government launched last year a 1.5-billion-euro ($1.8-billion) plan to support green hydrogen projects over the next three years, tapping a European Union Covid recovery fund to do so.

Adding private investments, close to nine billion euros will be spent by 2030.

– Future energy hub? –

Spanish energy companies such as Iberdrola, Repsol and Enagas have all launched green hydrogen projects. 

Enagas teamed up with global steel giant ArcelorMittal and fertiliser maker Fertiberia for a huge project dubbed HyDeal Espana in northern Asturias region.

The site will have around 15 solar parks that could produce 330,000 tonnes of hydrogen per year by 2030, making it the biggest project of this type in the world, according to the International Renewable Energy Agency.

“This shows the sector has matured,” said Brey of AeH2. “2030 may appear far away, but in reality it’s tomorrow.”

Spain “holds all the cards to become an energy hub,” he added.

But the country still has some obstacles to clear before it can become a leader in the burgeoning sector.

“To win, Spain will have to speed up the deployment of solar and wind farms, as electrolysis consumes a lot of electricity,” Cossent said, adding that projects were stuck in “administrative bottlenecks.”

Spain also lacks energy connectivity with the rest of Europe, but the government has revived a gas pipeline project linking Catalonia and France, which Madrid wants to use to ship hydrogen.

An Indigenous protester died Tuesday in clashes with law enforcement during a ninth day of demonstrations against the Ecuadorian government, which the military described as a “grave threat.”

The man, a member of the Quichua Indigenous group, was participating in a road block in the Amazon town of Puyo, when there was “a confrontation and this person was hit in the face, apparently with a tear gas bomb,” lawyer Lina Maria Espinosa of the Alliance for Human Rights organization told AFP.

Since June 13, multiple roads have been barricaded nationwide at a cost of hundreds of millions of dollars to the economy, in demonstrations over fuel prices called by the powerful Confederation of Indigenous Nationalities of Ecuador (Conaie).

Dozens of people — police and civilians — have been injured in clashes. 

The death of the protester, identified as Byron Guatatoca, 40, came after a young man died overnight when he fell into a ravine “trying to flee from the military” in a protest on the outskirts of Quito, said Guillermo Churuchumbi, the Indigenous mayor of Cayambe municipality.

The episode prompted the prosecutor’s office to open an investigation into possible homicide. The office was also stoned by protesters, and its glass doors were smashed.

In Quito proper some 500 protesters — among around 10,000 who arrived in the capital from around the country in recent days — were teargassed Tuesday as they blockaded a street with burning tree branches.

They quickly regrouped to march on the CCE culture center — traditionally used by Indigenous people to launch protests but requisitioned by police over the weekend to use as a base. 

“The objective of today is to retake the Casa de la Cultura,” protester Wilson Mazabanda told AFP before police used spray to break up the group.

Earlier in the day, Defense Minister Luis Lara said Ecuador’s democracy “faces a grave threat from… people who are preventing the free movement of the majority of Ecuadorans” with widespread blockades.

Flanked by the heads of the army, navy and air force, Lara warned the military “will not allow attempts to break the constitutional order or any action against democracy and the laws of the republic.”

Quito Mayor Santiago Guarderas said on Twitter the demonstrations “continue to escalate” and that the capital’s markets were running out of supplies.

– ‘Tired of this government’ –

Conaie — credited with helping topple three presidents between 1997 and 2005 — called the demonstrations as Ecuadorans increasingly struggle to make ends meet.

Indigenous people comprise more than a million of Ecuador’s 17.7 million inhabitants and wield much political clout, but are disproportionately affected by rising inflation, unemployment and poverty exacerbated by the coronavirus pandemic.

Thousands of protesters, many of whom had traveled to Quito on foot or on the backs of trucks, took to the streets wielding sticks, fireworks and makeshift shields made of road signs.

“We are already tired of this government,” said Mazabanda, a university student, of ex-banker President Guillermo Lasso’s one-year-old term.

Tito Zamora, a small-scale farmer, added that costs have risen sharply, “but not the price we get for our products.”

Lasso said on Twitter he was ready to participate in “a frank and respectful dialogue process with Conaie and other civil organizations.” 

“It is our duty to reach consensus for the good of the country,” the president said.

– State of emergency –

Fuel prices have risen sharply since 2020, almost doubling for diesel from $1 to $1.90 per gallon and rising from $1.75 to $2.55 for gasoline.

Conaie is demanding a price cut to $1.50 a gallon for diesel and $2.10 for gasoline.

It also wants jobs and food price controls.

The movement has since been joined by students, workers and other Ecuadorans feeling the economic pinch.

Dozens have been arrested, according to human rights observers.

Lasso on Monday extended a state of emergency to cover six of the country’s 24 provinces, with a nighttime curfew in Quito.

Ecuador is losing about $50 million a day as a result of the protests,  without counting oil production — the country’s main export product.

The CEO of state-owned Petroecuador, Italo Cedeno, said Tuesday output had dropped by about 100,000 barrels a day during the protests, in part because demonstrators have targeted both oil wells and power plants.

Ecuador’s parliament voted Monday in favor of a resolution urging the government to conduct a “serious, clear and honest” dialogue with protesters, mediated by the United Nations, the Red Cross, universities and the powerful Catholic Church.

In 2019, Conaie-led protests left 11 people dead and more than 1,000 injured but forced then-president Lenin Moreno to abandon plans to eliminate fuel subsidies.

As Europe seeks to move way from fossil fuels, Spain is racing ahead in developing green hydrogen, aided by a growing wind and solar power complex in efforts to decarbonise its economy.

Spain accounted for 20 percent of the world’s green hydrogen projects in the first quarter, second only to the United States, home to more than half of them, according to Wood Mackenzie consulting firm.

“A lot of countries are interested in green hydrogen, but in Spain the sector has rapidly accelerated” in recent months, said Rafael Cossent, research associate professor in energy economics at Comillas Pontifical University in Madrid.

The sector is still in its infancy, but the war in Ukraine has prompted the European Union to double its production goal for 2030 as part of efforts to reduce its dependence on Russian energy supplies.

“Spain has become a very attractive country for green hydrogen,” EU chief Ursula von der Leyen said during a visit to the country in May. “A shift is happening … to mass-scale competitive hydrogen”.

Green hydrogen is produced by passing an electric current through water to split it between hydrogen and oxygen, a process called electrolysis. It is considered green because the electricity comes from renewable sources of energy that don’t create any harmful emissions.

And while fossil fuels emit harmful greenhouse gases when they burn, hydrogen only emits harmless water vapour.

The technology is part of EU efforts to become climate neutral by 2050.

– ‘Great potential’ –

Green hydrogen could replace coal in heavy industries such as steel mills. It can also be used to make fertiliser and is being considered as a potential fuel for buses, trains and aircraft in the future.

A major drawback for green hydrogen, however, has been the high cost of producing it. It is much cheaper to make “grey” hydrogen, but its production requires using fossil fuels that emit greenhouse gases.

But technological progress and the surge in prices of fossil fuels has made green hydrogen more competitive.

Spain has “great potential” because it has a well-developed renewables sector, with important solar and wind resources, said Javier Brey, president of the Spanish Hydrogen Association (AeH2).

Cossent said that Spain has another advantage in its vast natural gas network and LNG terminals, which could be transformed to export hydrogen.

The government launched last year a 1.5-billion-euro ($1.8-billion) plan to support green hydrogen projects over the next three years, tapping a European Union Covid recovery fund to do so.

Adding private investments, close to nine billion euros will be spent by 2030.

– Future energy hub? –

Spanish energy companies such as Iberdrola, Repsol and Enagas have all launched green hydrogen projects. 

Enagas teamed up with global steel giant ArcelorMittal and fertiliser maker Fertiberia for a huge project dubbed HyDeal Espana in northern Asturias region.

The site will have around 15 solar parks that could produce 330,000 tonnes of hydrogen per year by 2030, making it the biggest project of this type in the world, according to the International Renewable Energy Agency.

“This shows the sector has matured,” said Brey of AeH2. “2030 may appear far away, but in reality it’s tomorrow.”

Spain “holds all the cards to become an energy hub,” he added.

But the country still has some obstacles to clear before it can become a leader in the burgeoning sector.

“To win, Spain will have to speed up the deployment of solar and wind farms, as electrolysis consumes a lot of electricity,” Cossent said, adding that projects were stuck in “administrative bottlenecks.”

Spain also lacks energy connectivity with the rest of Europe, but the government has revived a gas pipeline project linking Catalonia and France, which Madrid wants to use to ship hydrogen.

An ancient Buddhist city carved out of immense peaks near Kabul is in danger of disappearing forever, swallowed up by a Chinese consortium exploiting one of the world’s largest copper deposits.

Located at the confluence of Hellenistic and Indian cultures, Mes Aynak — believed to be between 1,000 and 2,000 years old — was once a vast city organised around the extraction and trade of copper.

Archaeologists have uncovered Buddhist monasteries, stupas, fortresses, administrative buildings and dwellings, while hundreds of statues, frescoes, ceramics, coins and manuscripts have also been unearthed.

Despite looting at the beginning of the century, Mes Aynak is “one of the most beautiful archaeological sites” in the world, says Bastien Varoutsikos, an archaeologist for the French company Iconem, which is working to digitise the city and its heritage.

But the need for the Taliban — who returned to power in August last year — to find new revenue streams after international aid was frozen has made mining the project a priority, and could put an end to further archaeological work.

– Mining consortium –

Objects discovered date mainly from the 2nd to 9th century AD, but an earlier occupation is also believed likely, and pottery dating back to the Bronze Age — well before the birth of Buddhism — has also been found.

Forgotten for centuries before being rediscovered by a French geologist in the early 1960s, Mes Aynak, in Logar province, has been compared to Pompeii and Machu Picchu in size and significance.

The ruins, which cover 1,000 hectares, are perched high on a massive peak whose brown flanks betray the presence of copper.

But in 2007 the Chinese mining giant Metallurgical Group Corporation (MCC) headed a state-owned consortium — that later took the name MJAM — and signed a $3 billion contract to mine ore over 30 years.

Fifteen years later, the mine still does not exist — insecurity and disagreements between Beijing and Kabul over financial terms of the contract have caused delays.

The project is once again a priority for both parties, however, and talks are ongoing on how to proceed.

– Duty of preservation –

Fears are rising that a place once considered one of the most prosperous trade hubs on the Silk Road could disappear without oversight.

In the early 2010s, it was “one of the largest archaeological projects in the world”, Varoutsikos told AFP.

MJAM originally suspended the start of operations for three years to allow archaeologists to focus on the area directly threatened by the mine.

That period was inadvertently lengthened as the security situation prevented the Chinese from building planned infrastructure.

As a result, thousands of objects were unearthed — some were taken to the Kabul museum, others kept nearby.

When it was last in power the Taliban shocked the world by dynamiting the giant Buddhas of Bamiyan in March 2001, but today they say they are determined to preserve the findings of Mes Aynak.

“It is the duty of the Ministry of Information and Culture to protect them,” Esmatullah Burhan, the spokesman for the Ministry of Mines and Petroleum, told AFP.

But while the rhetoric seems sincere, many of the remains are simply too bulky or fragile to be moved and seem destined to disappear.

The Chinese favour open-pit rather than underground mining. If this goes ahead, it would open up the copper mountain and bury all the fragments of the past.

– Environmental consequences –

Afghanistan is sitting on huge mineral resources of copper, iron, bauxite, lithium and rare earths estimated to be worth more than a trillion dollars.

The Taliban hope to earn more than $300 million a year from Mes Aynak — about 60 percent of the full state budget for 2022 — and now want to speed up the process.

“This project must begin, it must not be delayed any longer,” they have repeatedly told MJAM in recent weeks, according to Burhan.

The discussions are about “80 percent finished”, says the spokesman, with only technical points remaining to be settled, which should be done soon.

The Taliban are demanding that the contract — which includes the construction of a power station to supply the mine and Kabul, and a railroad to Pakistan — be respected. 

They also insist that the copper be processed locally with an Afghan workforce.

China, whose economy is in dire need of copper, is reluctant to meet these demands.

MJAM, which did not respond to AFP, also continues to demand a reduction in royalties due.

The project is also coupled with concerns about its environmental consequences. 

Copper mining is polluting and requires large quantities of water, and Logar is already an arid region.

According to Burhan, the Taliban are paying “strict attention” to these issues and will ensure that the consortium meets its obligations in this regard.

For now, the delay is some salvation for archeologists.

While there is currently no work going on at the site, Varoutsikos hopes to restart the excavation before the start of mining operations.

But even that will depend on international collaboration and funding, he notes.